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Innovation and Export of Vietnam's SME Sector

  • Anh Ngoc Nguyen

    ()

    (Development and Policies Research Center (DEPOCEN), 216 Tran Quang Khai Street, Hanoi, Vietnam)

  • Ngoc Quang Pham

    ()

    (Development and Policies Research Center (DEPOCEN), 216 Tran Quang Khai Street, Hanoi, Vietnam)

  • Chuc Dinh Nguyen

    ()

    (Aston Business School, Aston University, UK)

  • Nhat Duc Nguyen

    ()

    (Development and Policies Research Center (DEPOCEN), 216 Tran Quang Khai Street, Hanoi, Vietnam)

Innovation has long been considered an important factor for creating and maintaining the competitiveness of nations and firms. Common knowledge stands that innovation is the cause of the increase of exports. However, contradicting empirical evidences are reported in the literature on the causality between innovation and export. In this paper we examine whether innovation performed by small and medium enterprises (SMEs) enhances their exporting likelihood in the context of a developing country of Vietnam. Using an uniquely rich Vietnamese SMEs database, we find that innovation as measured directly by 'new products', 'new production process' and 'improvement of existing products' are important determinants of exports by Vietnamese SMEs. We add to the current literature by examining modification of existing products as an innovation activity. We also find evidence of endogeneity of innovation that may lead to biased estimate of innovation in previous studies, which failed to take this problem into account.

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Paper provided by Development and Policies Research Center (DEPOCEN), Vietnam in its series Working Papers with number 09.

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Length: 25 pages
Date of creation: Mar 2008
Date of revision:
Handle: RePEc:dpc:wpaper:0908
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  1. Greenhalgh, C. & Taylor, P. & Wilson, R., 1991. "Innovation and Export Volumes and Prices- A Disaggregated Study," Economics Series Working Papers 99107, University of Oxford, Department of Economics.
  2. Richard Blundell & Monica Costa Dias, 2002. "Alternative approaches to evaluation in empirical microeconomics," CeMMAP working papers CWP10/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  3. Stefan Lachenmaier & Ludger Woessmann, 2004. "Does Innovation Cause Exports? Evidence from Exogenous Innovation Impulses and Obstacles," CESifo Working Paper Series 1178, CESifo Group Munich.
  4. Andrew Bernard & Joachim Wagner, 1997. "Exports and success in German manufacturing," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 133(1), pages 134-157, March.
  5. repec:hal:journl:halshs-00197539 is not listed on IDEAS
  6. Valdemar Smith & Erik Strøjer Madsen & Mogens Dilling-Hansen, 2002. "Do R&D Investments Affect Export Performance?," CIE Discussion Papers 2002-09, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
  7. Teece, David J., 1996. "Firm organization, industrial structure, and technological innovation," Journal of Economic Behavior & Organization, Elsevier, vol. 31(2), pages 193-224, November.
  8. Jens Matthias Arnold & Katrin Hussinger, 2005. "Export Behavior and Firm Productivity in German Manufacturing: A Firm-Level Analysis," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 141(2), pages 219-243, July.
  9. Le Van, Cuong & Saglam, H. Cagri, 2004. "Quality Of Knowledge Technology, Returns To Production Technology, And Economic Development," Macroeconomic Dynamics, Cambridge University Press, vol. 8(02), pages 147-161, April.
  10. Greenhalgh, Christine, 1990. "Innovation and Trade Performance in the United Kingdom," Economic Journal, Royal Economic Society, vol. 100(400), pages 105-18, Supplemen.
  11. Alessandro STERLACCHINI, 1998. "Do innovative activities matter to small firms in non-R&D-intensive industries? An application to export performances," Working Papers 109, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
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